So you are interested in getting into cryptocurrency and making a decent amount of income? Everyone is getting to know about cryptocurrencies like bitcoin, ethereum and we read stories of people who make thousands of dollars from the cryptocurrency markets.
Cryptocurrency is becoming huge as more and more people try to get in. Still experts believe cryptocurrency still has a lot of progress to make – this means there are still more opportunities for people to get involved and make good money from cryptocurrency.
To take advantage of the opportunities in cryptocurrency you have to know about what is called – cryptocurrency exchanges. These are platforms where you buy, sell or hold cryptocurrencies. You also need to know about the major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), Polygon (MATIC) etc.
How Money is Made in Cryptocurrency
To make money from cryptocurrency you can choose from any of these six (6) strategies;
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Investing
Investing in cryptocurrency means to buy and hold crypto assets for long term. Cryptocurrencies may be volatile in the short term but when you buy and hold for a while they appreciate significantly in value.
This strategy requires you to find, buy and hold only major cryptocurrencies or assets that have shown long term price increase in the past such as Bitcoin, Ethereum. You buy them whenever you have spare cash and hold for as long as possible as they appreciate in value.
2. Trading
Many people make money from cryptocurrencies through trading. Trading crypto assets means exploiting the short term volatility of crypto by buying when they are low and selling when the prices rise.
To be a successful trader, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets so that you can make accurate predictions about price increases and decreases.
3. Staking and Lending
If you are the type that does not like to take risks you can actually make money (even if smaller gains) from cryptocurrency by staking and lending your crypto coins (assets). When you stake your coins, you still own them but can’t spend them. Instead you lock the coins in a cryptocurrency wallet.
The crypto network uses your coins to validate transactions and you receive rewards for that. The reward you receive is like the interest a bank pays you when you leave your money in your account so the bank uses it for business.
4. Airdrops and Forks
Cryptocurrency exchanges do airdrops to help attract users for a cryptocurrency project. If you are part of an airdrop you can get free coin that you can then use to buy things or to invest or trade.
A blockchain forks because of changes or upgrades in a protocol that create new coins. If you hold coins on the original chain, you will typically get free tokens on the new network. This means you get a free coin because you were in the right place at the right time.
5. Dividends
Just the way some stocks pay dividends to shareholders who own those stocks, in crypto there are coins or crypto assets that also pay dividends. While you may not see a tidal wave of dividends hit your crypto account without a large balance, it can be a way to make money with the crypto you already own. However, you need to do some research to see which cryptocurrencies are paying dividends and whether the dividends are worth it.
Some cryptocurrencies that pay dividends in more coins (or tokens) include VeChain, NEO, Reddcoin, NAVCoin, Decred, and their annual dividends broadly. Therefore, cryptocurrency dividends differ from stock dividends in that they pay additional tokens rather than cash.
6. Mining
Cryptocurrency mining is a crucial component of the proof of work mechanism. If you mind a cryptocurrency, you are rewarded with the new coins. Mining requires technical expertise and computing investment. You need to have a coding background and massively powerful computers in cold environments.